Market Crash: 7 steps to keep in mind

The 'August' fall in the stock market still has many of us at the edge of our seats. With their wealth and dreams on the line, who wouldn�t be! And after the last US market crash during late 2007, all people want to do is keep their wealth safe. While this fall doesn�t seem as bad as the recession right now, many of us are already in a state of flux, unsure of what we should do.

Over the past few weeks, several people have been asking the same question

� �What should I do now?� Does one take their money out and start preparing for a market meltdown or should they stay put and continue investing? It has been observed that an overwhelming majority of people wanted to just stop investing and keep their money safe.

While 'protecting' your investment is the most natural thing to do, following up on your dreams and goals is also an important aspect of life itself. Realizing those dreams is what we live and earn for. And putting a halt to them is not the answer. Here are seven things you shouldn�t do when you find yourself in this situation:

Don�t proceed without planning: Things may seem bad at the moment, but pulling out of your investment without a second thought is as dangerous as self medication. If you do find yourself in such a situation, plan on how you would like to retreat your investments. Abruptly stopping all payments on the same, will not only cause disharmony in your money matters but also put an end to all your dreams.

Don�t panic: Panic is the most natural state of mind, when things go haywire. If you do find yourself in this situation, have a calm discussion about how you should proceed. Panicking will only cause more grievances and force you to make bad decisions.  An apt move to make at this point would be to speak openly to a certified financial planner who will be able to guide you in the best possible manner.

Don�t end your financial plan: Investing during times of financial crunch, especially for retirement, may sound unreasonable to many, but remember that this investment is being done for your future. If you are currently investing in a plan, try to continue the same instead of putting it to a complete halt. You can always rework your monthly investment to suit your financial needs.

Don�t get carried away with the market: The volatility of the market may scare you and your financial plans, but it is best not to be carried away by this fear.

Don�t get emotionally carried away if you see the market falling and avoid taking impulsive decisions. Keeping your money safe is the key.

Don�t be influenced by short term losses: The term loss itself will set of various alarms in your head. If you find your investments and stock options under this position, try not to get ahead of yourself. If you have used a particular tool for a long term plan, then these losses would not affect very heavily on your plans or your investments.
 
Do not ignore the importance of family in financial decisions: The breadwinner of the family is usually the one to make decisions. However, it is important that you keep your family in the loop of the current situations, as it is also their financial future that depends on this. You may not be able to change the outcome of the markets, but you can keep your family�s future safe.

Don�t give up: One cannot stress on this enough. You cannot give up on the idea of having a financially secure future, just because the present situation seems murky. Remember to always have a contingency plan that will help you during such situations. This would ensure that your present and your future safety are withheld. This situation will pass, and all you need to remember is that there are people who can guide you and support you in times of financial turmoil.

While it�s easier said than done you can protect your own future through these simple methods. All you need to do is just keep the faith. 

Is Your Connected Car Obsolete Before You Buy It?

The Connected Car Conference -- or C3, if you wish to get your geek on -- was a big hit at CE Week in New York City. Thanks largely to navigation and entertainment apps on Apple and Google smartphones, it's easy to marvel at how far we've come in bringing our outside world inside our vehicle. But C3 also concentrated on the future, and what automakers and their partners are doing to increase your car's usefulness and safety.

Our roving reporter Rex Moore talked with General Motors' (NYSE: GM  ) chief technology officer Tim Nixon at the conference. His Chevrolet MyLink system offers Pandora and Sirius XM for entertainment, a BringGo navigation system that runs from your smartphone so your maps are never out-of-date, and Apple's Siri Eyes Free, which allows you to interact with Siri without having to view the screen. In fact, the screen won't even light up while your car is in motion.

Still, advances in consumer electronics far outpace the product cycle of a car, which could be obsolete by the time it hits the showroom floor. In the video below, Tim talks about how his company addresses these concerns.

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Why GM Hasn't Repaid Taxpayers

GM headquarters in Detroit. Photo credit: General Motors Co.

It's a question that readers ask me all the time: When will General Motors (NYSE: GM  ) repay taxpayers?

The answer is that it depends on how you look at it.

Legally speaking, GM has already repaid the $49.5 billion loan it got from the U.S. government to fund its bankruptcy restructuring in 2009. GM gave the U.S. Treasury a mix of cash and stock, as agreed. There's nothing more that GM is required to do under the terms of those loans. It's a done deal.

But here's why some folks continue to complain: The amount that has been returned to the U.S. Treasury so far is much less than that $49.5 billion.

The government has been recovering more every month, as it sells off its holdings of GM stock. But as I'll explain, the government probably doesn't have enough stock left to fully pay off the debt.

The government has been selling off its stock ...
Here's the background: At this time last year, the U.S. Treasury Department held just over 500 million shares of GM's common stock. But last December, GM and the Treasury struck a deal: GM agreed to buy 200 million of those shares outright, for a price that was a bit above what the stock was trading for on the market at that time.

In turn, the Treasury agreed to start selling off the remaining 300 million shares on the open market -- gradually, so as not to disrupt the markets. It said that it would complete its sales by next spring.

The first of those sales happened early this year. Since then, the government has been releasing monthly updates on its progress. Last week, it said that it had sold nearly $2 billion worth of stock in June.

Here's how GM's "repayment" so far breaks down.

... but it's likely to come up short in the end
As I said, Treasury's loans to GM totaled $49.5 billion. Of that, the Treasury has since recovered around $33.4 billion.

A little over $6 billion of that came from the Treasury's stock sales since January, along with dividends and interest received since GM emerged from bankruptcy. The remainder breaks down like this:

$6.7 billion in cash, the last of which was paid in April 2010. That was when then-CEO Ed Whitacre declared that GM's debt had been "paid in full," which was not his best move. $13 billion via GM's IPO, back in 2010. The government sold about 45% of its stock holdings at that time. $2.1 billion recovered when GM bought back some preferred stock from the Treasury in late 2010. $5.5 billion when GM bought back those 200 million shares from the Treasury last December, as I mentioned.

The upshot? The Treasury is still a little over $16 billion short – but it has about 160 million shares of GM stock left to sell.

That's not likely to be enough to make things whole.

So where will that leave taxpayers – and GM?
At current prices, those shares are worth a little less than $6 billion. Unless GM's stock goes way up, and soon, Treasury is going to be left with a shortfall after it sells the last of its stock. That shortfall is likely to be in the neighborhood of $10 billion.

Now, it's possible to argue that the U.S. government has received more than $10 billion in value from its decision to save General Motors. That decision kept the U.S. automotive supply chain alive in a time of deep crisis, which probably indirectly saved Ford as (NYSE: F  ) well -- along with thousands and thousands of American jobs. The recession would have been a lot worse had the U.S. auto industry collapsed.

But it's also possible to argue that GM, which is now a solidly profitable global company with more than $20 billion in cash on hand, might be obligated to make up some or all of that $10 billion shortfall -- morally, if not legally.

What do you think? Scroll down to leave a comment and let me know.

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Renren Launches New Share Buyback Program

Renren (NYSE: RENN  ) hopes to boost the value of its American Depositary Shares by repurchasing big chunks of them. The company's board has authorized a buyback program for up to $100 million worth of ADSes. The program is effective as of today, and will be in force for one year.

This replaces an existing $150 million initiative that had nearly been exhausted. That effort was launched in September 2011.

The buybacks for the current program will be effected through various means, including open market purchases, block trades, privately negotiated buys, and other "legally permissible ways".

In the press release announcing the move, Renren quoted its CEO Joseph Chen as saying that, in spite of the expense, the firm will "continue to focus on our long-term strategy of building a sustainable business around mobile-centric social networking." 

Currently, Renren has more than 377 million shares outstanding. Its most recent closing stock price was $2.99 per share.

Is a Great Company Necessarily a Great Investment?

A director at Deloitte Services LP and coauthor of The Three Rules: How Exceptional Companies Think, Michael Raynor joins the Fool to share his findings about what makes a company successful for the long haul.

In this video segment, Michael discusses the diversity of the Miracle Worker companies and how the fundamental rules allow companies to follow the same "recipe" using different ingredients. The full version of the interview can be seen here.

A full transcript follows the video.

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Brendan Byrnes: If an investor is looking at your book and saying, "How do I go over that methodology? How do I look at companies this way?" what would you say to them when they're trying to evaluate a company?

Michael Raynor: That's a great question.

First of all, I'd say that our work is fundamental in nature. We're looking at company fundamentals and we try to understand companies that are great companies, rather than necessarily identifying companies that are going to be great investments.

Now, it does turn out, however, that companies that deliver superior profitability tend to have better total returns to shareholders than companies that don't deliver superior profitability. Being an adherent to the three rules, as far as our data are concerned, suggests good things for equity holders.

Brendan: I think you mentioned there are 18 companies in that upper echelon that you found. What's the one that impressed you the most?

Michael: That's an interesting question. I hadn't really thought about the "top of the Pops." I think they all impressed me in very different ways because they all had their own unique formula for delivering exceptional performance.

Again, that's why rule No. 3 is There Are No Other Rules. It's all about being better and driving revenue. In a sense, every company's got the same recipe but fundamentally different ingredients. It was the uniqueness of every one of them that I found so impressive and, frankly, so surprising.

Brendan: Could you maybe walk us through a few examples of specific companies amid those 18?

Michael: Sure. We have three categories of Miracle Workers. I'll give you one of each.

In our "Kept It" category -- these are companies that have been consistently miracle workers over their entire observed lifespan -- Abercrombie & Fitch (NYSE: ANF  ) is one that has really impressed us with their ability to adhere to those two rules, really through thick and thin, sometimes taking a lot of heat for it from the investor community, but sticking to their guns in ways that we find pretty impressive.

There are "Lost It" Miracle Workers; companies that were great for a while but then kind of came off the rails. A company like Maytag, for example, would fall into that category. They spent 20 years, from the middle '60s to the middle '80s -- one of the longest streaks of superior performance in our entire database -- but then really came off the rails, kind of lost their way, were unable to stay close to the rules.

They were acquired by Whirlpool (NYSE: WHR  ) , ultimately. Curiously, a lot of what you see Whirlpool doing with the Maytag brand looks suspiciously close to following the rules again, so that's promising, at least in our view.

Then finally, "Found It" Miracle Workers, companies that bounced around for a while -- kind of like wayward teenagers -- and then found their way. A company like Linear Technology (NASDAQ: LLTC  ) , for example, a semiconductor manufacturer, would fall into that category. It started out as a second source supplier for the USDOD [and] now makes a vast array of highly customized, very highly differentiated analog microprocessors.

Again, enormous diversity, but what ties them all together: Better Before Cheaper and Revenue Before Cost.

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